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EXCLUSIVE SUMMARY
As the tendency that the white-collar workers become the main urban population,
their working stress is also to be concerned wisely. Therefore, the relevant diet
problem has got our great attention. Though the competition pressure of the related
market is quite high, we still believe that whether comparing to the canteen where
the benefits cannot reach everyone, or the unhealthy takeaway, I-Food has its unique
competitive advantages.
We will first describe the business overview, the industry and market analysis, and
later, the details of our product. Then, focus on the operation plan including location
selection and supply chain. Moreover, the marketing plan and the finance plan will
be stated.
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BUSINESS OVERVIEW
I-Food focuses on white-collar workers aged 20 to 40 and always have irregular lunch
due to working pressure. Using 24h lunch vending machines located downstairs in
commercial buildings and online ordering applet, I-Food provides a variety of lunches,
including rice, noodles, dumplings, wonton and snacks. Because heating, water
injection, transportation, storage and food delivery are automated processes in the
vending machine, I-Food can save a lot of time. Additionally, because vending
machines include microwaves and water dispensers, I-Food's lunches are steaming
and delicious.
I-Food’s vision is to have our machines cover all the start-up office buildings and
providing a hot meal for every employee in need.
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Industry Analysis
“I-Food” operates in the retail industry, particularly in the “fresh food vending
machine” industry. According to the data in Figure1, in terms of the equipment
ownership, since 2011, the trend of the number of self-service vending machines in
China grown more than 30%. In 2020, the number in China reached 2.3 million.
Additionally, Figure2 illustrates that the market size of vending machine industry is
still increasing.
The global vending machine market maintains a relatively slow growth, among which
Japan is the most developed country in the vending field. Japan has a market stock
of more than 5 million units and an annual sales volume of more than 60 billion US
dollars, with an average of one vending machine for every 25 people. However,
China's per capita self-vending machine ownership is 5,000 per person, which shows
that China has a large space for growth. Especially, Figure3 demonstrates that the
food subsidized vending machines only account for 6% of the whole industry, which
shows that there is a huge development potential for food vending machines.
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Starting from the PEST model, we analyse the influence of politics, economic, social
behaviour and technology to the industry.
Conclusion: The retail industry is booming in China, with support and needs from
the government and society. To better respond to the habits and preference of
consumers, players in the industry should constantly adapt and innovate in terms of
health, flavour and convenience of food, by making use of technology.
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In addition to PEST model, Porter's five forces model can be used to analyse the
five factors that determine the scale and degree of competition in the vending
machine industry, thus designing I-Food's strategic decisions.
In conclusion, the results from analysis by Five Forces are not attractive to us, but
these can be changed because of our competitive advantages. Thus, the whole
industry trend is still very positive. The following are our advantages and solutions
for Five Forces.
High Substitutes Threat • Offer a wide variety of instant hot fresh food,
which has more variety of fresh food than
convenience stores and faster than takeout.
Market Analysis
Consumer Analysis
Note: Specific market positioning and target customers will be explained in the marketing
plan part.
Market Potential
• Primary Potential:
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=¥28,485,000,000
• Secondary Potential:
=1800×3%×¥25×250
=¥270,000
Office Building
=1800×3%×¥25×250×38
=¥10,260,000
=¥20,520,000
Conclusion: After a rough estimate, the market potential of a business office area is
about ¥10.26 million, which indicates a huge market potential.
Competitor Analysis
As shown below, I-Food has one direct rival and three indirect rivals. The two most
competitive rivals are canteen and take-away food. Overall, I-food has high level of
quality, efficiency, stability, but relatively high price and limited range of selection.
Efficiency10 1 1 0 0 0
Stability11 1 1 1 -1 0
Diseases12 1 1 -1 0 1
Selection 0 -1 0 1 0
Total 5 0 2 2 0
PRODUCT PLAN
General Introduction
I-Food is an instant fresh food vending machine that serves noodles, rice, dumplings,
wontons, and snacks. Customers can pick up their lunch by ordering and making
reservations on the applet or by placing an order directly from the vending machine's
screen interface. Then, the food will be processed by the machine through a series
of automatic processes of water filling, heating, heat preservation and disinfection.
After that, the user can take the food from the locker or the outlet, and finally take
the lunch to their favourite place through the portable packaging designed by us.
The whole circular shape forms the word “good”, and our product name I-Food is
embedded in the circle. Each letter is designed in a special shape. “I” is the
combination of forks and spoon, “F” is the cabinet door, “O-O” represent our main
products, and the last letter “D” looks like a clock. The main concept is to show our
idea of fast and delicious.
Feature
Menu
According to the survey data, people prefer fresh food such as Bento to instant food
such as sushi. Therefore, the main food category we provide is fresh food. Among
the fresh food, the most popular are noodles, rice and dumplings. Besides, special
snacks such as “Mutton bread in the soup” are also popular with the public. Therefore,
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our menu mainly offers different kinds of noodles, rice, dumplings, wontons and
snacks.
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Machine
We provide an instant fresh food vending machine, which is roughly 2 meters long,
1.5 meters wide, and 2 meters high.
• The bottom of the machine is equipped with a punching machine, a water injection
machine, and a heating machine.
• After the food is prepared, a pair of tracks located on the right side of the machine
will transport the food to a locker for customers to pick up their lunch.
Meal Box
For the convenience of customers to take, we provide lunch boxes. The lunch box is
20cm long, 14cm wide and 7cm high. Its design has three main features. First, hot
water can be pumped into the box through the top hole. Secondly, the armrest on
both sides of the box can be convenient for customers to pull. Thirdly, it has two
layers of packaging. The inner layer is plastic, and the outer layer is paper packaging.
Tableware can be placed between the plastic packaging and paper packaging.
(operation process)
(structure)
Applet
analysis. In the “Order” section, customers can make reservation and scan the code
to get the food. In addition to the above two parts, the "I" part contains the user
information, after-sales service, membership service and coupons.
The user journey map below can visually show the user's pain points and product
opportunity points.
Uniqueness
customers can make a reservation for food online, then they are able to pick it up at
their convenience.
First, we deal with the problems of those young employees and entrepreneurs that
they are busy with work so that they have irregular diet habit. It is inconvenient for
them to look for food at non-mealtime, but we can provide delicious food efficiently
and save their time. Moreover, some employees concern about the taste and nutrition
of the food they eat every day. We have various flavours and types of meal to choose,
at the same time we can ensure the materials are fresh and healthy. Thus, we can
provide efficient, tasty and healthy alternatives for busy employees.
OPERATION PLAN
The non-core activities will be outsourced, considering that it should be more focused
on the core business and external resources could be used to reduce initial in the
early stage of entrepreneurship.
The operation plan will be elaborated from three aspects: location, quality control,
and supply chain management.13
Work
Sructure
B2C Product
Operation Development
Vending
Quality Supply Chain Food
Location Machine
Control Management Production
Manufacturing
Location
City: Ningbo
The office is located in Ningbo, where has large number of target customers,
relatively moderate competition intensity and lower cost. The following is the analysis
process.
Intensity of
25% 0 -1 1
Competition14
Purchasing Power 20% 0 1 -1
Consumer
25% 1 1 -1
Demand15
Rental 20% 0 -1 1
Moral Level of
10% 1 1 0
Neighbourhood16
Total 100% 0.35 0.1 0
Quality Control
The criterion of HACCP (Hazard Analysis Critical Control Point), ISO9000, besides,
14 The lower intensity of competition, the higher score: According to the resource, most of the competitors of
I-food mentioned above in super first-tier cities (like Shanghai), has overcome most disadvantages such as low
efficiency, low stability and limited selection. Thus, the intensity of competition in Shanghai is much higher than
that in Ningbo.
15 Refer to the demand of fast and high-quality meal.
16 The higher moral level of neighbourhood, the higher score: Because our machine is an unattended self-
service machine, to ensure the tidy and normal operation of the machine, it has higher moral requirements for
users and neighbourhood.
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Our supply chain is mainly divided into four parts: machine and raw material
purchasing, transportation of machines and raw materials from the factory to the
freezer (Ningbo), distributing the products to each vending machine, and daily
machine maintaining.
•Food
From refrigerat From
Purchas •Machine Transpor Distribu
factory to Storage ing. warehouse
-ing •Product -tation -tion
Ningbo. •Machine to Ifood.
installing.
Note:
• Transportation: Products are transported from Qingdao (supplier's factory) to Ningbo
(warehouse) by logistics company.
• Storage: In Ningbo, we rented a freezer and stored the food in it.
• Distribution: The products will be distributed to I-Food machine in the office building by
the delivery staff.
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MARKETING PLAN
Market Positioning
Our customers are mainly white-collar workers aged 20-40 in Ningbo business area.
First, the reason for choosing Ningbo is that the distribution system and
replenishment system of Ningbo are not so perfect compared with first-tier cities, so
the competitive pressure is less. In addition, the consumption level in Ningbo is lower
than that in first-tier cities such as Shanghai, so customers are more willing to buy
I-Food's lunch. Second, we choose white-collar workers in start-ups. Because white-
collar workers in start-up companies have a low-income level and a high sensitivity
to price, their consumption level is moderate. Besides, white collars in start-up
companies are under great pressure and have a higher frequency of irregular lunch,
so they need to solve lunch faster. In addition, white-collar workers have higher
requirements for delicious and healthy food. Thirdly, in terms of age, people aged 20
to 35 are more receptive to new things and more willing to try new lunch solutions,
so younger people are more likely to buy I-Food lunch than older people. SWOT
analysis can then be used to further evaluate our market.
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4P Strategy
Product:
Price:
Because there are many costs of non-current assets in year 1, which will deviate the
result. We use the data in year 2 instead that in year 1 to calculate mark-up price,
and the result is ¥24.
Year 1 ¥
Direct cost (per unit) ¥10.6
Indirect cost (fixed cost) ¥2,101,396
Expected sales ¥135,183
Cost per unit
Direct cost ¥10.6
Indirect cost ¥15.54
Full cost ¥26.14
Mark-up (50%) ¥13.07
Price (Cost per unit + Mark-up) ¥39.21
Year 2
Direct cost (per unit) ¥10.6
Indirect cost (fixed cost) ¥869,348
Expected sales ¥171,030
Cost per unit
Direct cost ¥10.6
Indirect cost ¥5.08
Full cost ¥15.68
Mark-up (50%) ¥7.84
Price (Cost per unit + Mark-up) ¥23.52
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The results of our questionnaire were as follows, with a price of ¥26 calculated by
In conclusion, I-Food aims at providing customers high value products with high
quality and medium price. By using cost-based and value-based pricing strategy, the
average price of I-food product will be set at ¥25 with the range of ±¥3. The price
diversify depends on the type of ingredients, which provides multiple option for price
sensitive customers.
Promotion:
Offline:
1. Within a week of the machine landing, staffs will do propagandize in the
nearby Business District, handing out peripheral products like dolls, portable
tableware or discount coupon to attract attention.
Online:
1. Operate independent accounts on different social platforms, such as
WeChat, Weibo, etc. Regularly update our brand stories, the stories behind the
production, the stories on the production line and the information of our new
product or activities.
3. Cooperate with some KOLs. For example, send our products for them to
do products review, placing emphasis on delicious and healthy. Besides, we will
invite some of them to our company to try our machine and show the followers
their experience. Moreover, we will send them samples to taste once we launch
a new type.
Place:
Reasons:
• Why SME Incubation Park: High target customer density
FINANCIAL PLAN
Revenue
Our main revenue comes from selling food and advertising from vending machines.
Since the purchase of machinery was not included in our costs in the second year,
our costs dropped substantially. Combined with sales, we estimate that we will break
even in the first quarter of the second year.
Cost Structure
Year 1 ¥ Year 2 ¥
Direct cost (per unit) 10.6 10.6
Materials (food, package & tableware) 10.3 10.3
Water cost 0.3 0.3
22 Supplier is Guangzhou BoaDa Intelligent Technology Co. Ltd. The price is 30,000¥ per machine (R & D expenses
and equipment maintenance cost included);
23 One kilowatt-hour per day is needed for each machine (¥1.2/ kilowatt-hour). Thus the total electricity cost for
each machine is 365x¥1.2x1=¥438;
24 Machine manufacturer warranty, thus the cost of equipment maintenance is¥0. Thus the total labour cost is
6000x2x12=¥144,000;
25 Freight (from factory to warehouse) ¥24,000 per year; The cost of van purchasing (for city transportation) :
¥100,000; Oil cost: ¥12000 per year; Maintenance budget ¥20,000 per year;
26 Rental cold storage: ¥2 /square meter dayx50 square meters x365 days;
27 Office rent & utilities;
28 Food wreck:137,942x1%=1379 ,1379x ¥10.3=¥14,203.7;
29 The general mark-up ratio of catering industry;
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REFERENCES
Requirements
1. Your gender
11. What are the drawbacks of the current lunch solution do you think?
12. If there is a vending machine that serves instant fresh lunch, the price you
would accept is?